GOSI Contributions

GOSI contributions are the mandatory monthly social insurance payments that employers and employees in Saudi Arabia must make to the General Organization for Social Insurance (GOSI), known in Arabic as Al Ta’minat Al Ijtima’iyah. Established under the Social Insurance Law (Royal Decree No. M/33), GOSI is the cornerstone of Saudi Arabia’s social protection framework, funding retirement pensions, unemployment benefits, occupational hazard coverage, and disability and survivor support for millions of workers across the Kingdom.

For any business operating in Saudi Arabia, GOSI registration and accurate contribution management is not optional. It is a legal requirement enforced by the Ministry of Human Resources and Social Development (MHRSD), tied directly to the Saudization (Nitaqat) program, the Qiwa platform, and Wage Protection System (WPS) compliance through Mudad.

The Three Branches of GOSI

GOSI contributions are split across three insurance branches, each protecting a different aspect of an employee’s working life:

• Annuities Branch (Pension): The largest component, funding retirement pensions for Saudi nationals and GCC nationals. Contributions are split between employer and employee.
• Occupational Hazards Branch: Covers work-related injuries, disabilities, and deaths. This branch applies to all employees in Saudi Arabia, including expatriates, and is funded entirely by the employer.
• Unemployment Insurance (SANED): Provides financial support to Saudi nationals who lose their jobs through no fault of their own. Both employer and employee contribute equally.

GOSI Contribution Rates for 2026

As of 2026, Saudi Arabia operates two parallel GOSI contribution systems following the introduction of the New Social Insurance Law on 3 July 2024. The correct rate depends on when the Saudi employee was first registered with GOSI.

Existing System (employees registered before 3 July 2024)

For Saudi nationals already in the system, GOSI rates remain unchanged at a combined 21.5 percent:

• Employee share: 9.75 percent (9 percent pension + 0.75 percent SANED)
• Employer share: 11.75 percent (9 percent pension + 2 percent occupational hazards + 0.75 percent SANED)

New System (employees registered on or after 3 July 2024)

Saudi nationals enrolled under the New Social Insurance Law are subject to a phased contribution increase that runs through 2028.

• Combined rate is 22.5 percent until July 2026
• Rises to 23.5 percent from 1 July 2026, with annual 0.5 percent uplifts thereafter
• Retirement age under the new system is 65

Non-Saudi (Expatriate) Employees

Expatriate workers in Saudi Arabia are not covered by the pension or SANED schemes. Their GOSI rate is fixed at 2 percent, paid entirely by the employer, and covers occupational hazards only.

Contributable Salary and Salary Cap

GOSI contributions are calculated on the contributable wage, which equals basic salary plus housing allowance. The monthly contributable wage is capped at SAR 45,000, meaning any salary amount above this threshold is not subject to GOSI deductions. Other allowances such as transport, phone, commission, and bonuses are excluded from the contributory base.

Who Must Register with GOSI?

Every private sector employer in Saudi Arabia must register their business and employees with GOSI before processing payroll. Registration covers:

• Saudi national employees (full GOSI coverage including pension and SANED)
• GCC national employees (covered under their home-country pension rules)
• Expatriate employees (occupational hazards coverage only)
• Mid-month joiners and leavers (contributions prorated based on actual days worked)

Failure to register employees correctly with GOSI can result in fines, MHRSD penalties, blocked work permits, and disruption to Qiwa, Nitaqat, and WPS compliance.

Employer Responsibilities for GOSI Compliance

To stay aligned with Saudi social insurance regulations, employers must:

• Register the company and every employee with GOSI through the official GOSI portal at gosi.gov.sa.
• Identify each Saudi employee’s correct system (existing or new) based on their first GOSI registration date.
• Calculate monthly contributions on the contributable wage, applying the SAR 45,000 cap.
• Update salary changes through the GOSI portal by the end of the month following the effective date.
• Pay GOSI contributions on time each month to avoid penalty interest.
• Maintain accurate payroll records for audit and compliance verification.
• Align GOSI processing with WPS, Mudad, Qiwa, and Saudization reporting requirements.

Common GOSI Compliance Challenges

GOSI contributions look simple on paper, but most multinational employers operating in Saudi Arabia run into recurring issues:

• Misclassifying Saudi employees between the existing and new GOSI systems
• Handling phased rate uplifts under the New Social Insurance Law
• Calculating prorated contributions for mid-month joiners and leavers
• Applying the SAR 45,000 salary cap correctly across mixed allowance structures
• Synchronizing GOSI data with Qiwa, WPS via Mudad, and Nitaqat reporting
• Managing GOSI for GCC nationals under home-country pension agreements
• Keeping pace with annual GOSI rate changes through 2028

For multinational employers, manual GOSI calculations create real exposure to penalties, audit failures, and incorrect Saudization band classification.

How Mercans Simplifies GOSI Compliance

As a global leader in payroll technology and Employer of Record services, Mercans helps multinational organizations and regional businesses manage GOSI contributions accurately and effortlessly through its proprietary HR Blizz payroll platform. With deep expertise in Saudi labor law, social insurance rules, and Vision 2030 reforms, Mercans delivers end-to-end automation for every component of Saudi payroll.

With Mercans, employers operating in Saudi Arabia get:

• Automated GOSI calculations under both the existing and new social insurance systems
• Real-time application of the SAR 45,000 contributable wage cap
• Accurate handling of SANED unemployment insurance and occupational hazards contributions
• Direct integration with Mudad for WPS-compliant salary payments
• Synchronization with Qiwa, Nitaqat, and Saudization reporting requirements
• Prorated GOSI calculations for mid-month starters and leavers
• Multi-currency payroll processing in SAR with full localization
• Bilingual payslips (Arabic and English) and bank-ready output files

Explore Mercans’ Saudi Arabia payroll platform at https://mercans.com/payroll-software/saudi-arabia/ and the full KSA payroll service at https://mercans.com/global-payroll/saudi-arabia/.

For the latest regulatory update on GOSI rates, the SANED fund, and the phased reform schedule, read Mercans’ statutory alert: Saudi Arabia: GOSI Contribution Rates & Saned Unemployment Fund 2026. Background on the framework is available in Mercans’ alert on the Implementation of the New Social Security Law.

Companies expanding into Saudi Arabia without a local entity can also rely on Mercans’ Employer of Record solution to manage GOSI registration, payroll, and compliance end to end. Learn more in the guide on Saudi Arabia Payroll Outsourcing.

Frequently Asked Questions About GOSI Contributions

What is GOSI in Saudi Arabia?

GOSI stands for the General Organization for Social Insurance, the Saudi government body that manages mandatory social insurance for workers in the Kingdom. GOSI funds retirement pensions, SANED unemployment benefits, occupational hazard coverage, and disability and survivor support for Saudi and expatriate employees.

What is the GOSI contribution rate for 2026?

For Saudi nationals registered before 3 July 2024, the combined GOSI rate stays at 21.5 percent (employer 11.75 percent and employee 9.75 percent). Saudi nationals registered after 3 July 2024 follow the New Social Insurance Law, with a combined rate of 22.5 percent until July 2026, rising to 23.5 percent from 1 July 2026 under annual 0.5 percent uplifts.

Do expatriates pay GOSI in Saudi Arabia?

Non-Saudi employees do not contribute to GOSI from their salary. Their employer pays 2 percent of the contributable wage for occupational hazards insurance only. Expatriates are not covered by the pension scheme or SANED unemployment insurance.

What is SANED unemployment insurance under GOSI?

SANED is the unemployment insurance program within GOSI that supports Saudi nationals who lose their jobs through no fault of their own. Both employer and employee contribute 0.75 percent each, totaling 1.5 percent of the contributable wage.

Is housing allowance included in GOSI contributions?

Yes. GOSI is calculated on basic salary plus housing allowance, with a combined monthly cap of SAR 45,000. Allowances such as transport, phone, commission, and bonuses are excluded from the contributable wage.

What is the maximum salary subject to GOSI?

The maximum contributable wage for GOSI is SAR 45,000 per month. Any salary above this threshold is not subject to social insurance deductions or employer contributions.

How are GOSI contributions calculated for mid-month joiners and leavers?

Since February 2022, GOSI contributions for employees who start or leave mid-month are prorated based on the actual number of days worked during that month. For example, an employee joining on the 20th of a month is liable for GOSI from that day onward.

What happens if an employer does not pay GOSI on time?

Late or incorrect GOSI payments result in financial penalties calculated per month of delay. Non-compliance can also affect Saudization band classification under Nitaqat, restrict Qiwa services, and disrupt work permit issuance and renewals.

How does GOSI connect to WPS and Saudization compliance?

GOSI data is directly tied to Saudi Arabia’s broader payroll compliance ecosystem. WPS payments through Mudad are validated against GOSI-registered salaries, while Saudization (Nitaqat) classification depends on the number of Saudi nationals registered with GOSI and their reported wages.

How does Mercans help employers manage GOSI compliance?

Mercans automates the entire GOSI workflow through its HR Blizz platform, covering registration, monthly contribution calculations, SAR 45,000 cap application, SANED and occupational hazards, prorated joiner and leaver scenarios, and direct integration with WPS via Mudad. Companies can get started at the Mercans Saudi Arabia payroll page or explore Mercans payroll software for KSA.